The Electronic
Fraud Detection System (EFDS) is used by the Internal Revenue Service (IRS)
Criminal Investigation Division to detect fraudulent returns and to prevent the
issuance of questionable refunds. The
EFDS is the IRS’ second largest repository of taxpayer data. Security over the System is vital to ensure
it is available to prevent fraud and to protect the privacy of taxpayers’
personal information.

WHY TIGTA DID THE AUDIT

This
audit was initiated to follow up on a prior TIGTA audit.In September 2006, TIGTA reported
that the security of the EFDS had not been properly assessed since 2001, and recommended
the Chief, Mission Assurance and Security Services, in coordination with the
Chief, Criminal Investigation, complete a security
certification and accreditation for the EFDS and supporting computers before the restored EFDS was permitted to operate.The overall objective of this audit was to assess the effectiveness of the security controls
testing conducted as part of the certification and accreditation of the EFDS.

WHAT
TIGTA FOUND

The EFDS
security controls were effectively tested and evaluated.However, the Criminal Investigation Division
and the EFDS Project Office missed an opportunity to correct some of the
significant security vulnerabilities prior to restoring the EFDS in January
2007.

The Chief,
Criminal Investigation, granted a “restricted authorization to operate” for the
EFDS. This is not a valid accreditation
decision. An Interim Authorization to Operate, rendered when vulnerabilities are
significant but can be addressed timely, would have been the appropriate
accreditation decision for the EFDS.

WHAT TIGTA RECOMMENDED

TIGTA
recommended the
Chief, Criminal Investigation, issue an Interim Authorization to Operate for
the EFDS and require specific terms and conditions be met before an
Authorization to Operate is granted.

In
their response to the report, IRS management disagreed with the recommendation.The Chief, Mission Assurance and Security
Services, stated that the decision of the Chief, Criminal Investigation, to
issue an Authorization to Operate is fully supported because (1) no “high”
security risks were identified for the EFDS and (2) an updated Plan of Action
and Milestones is in place and being maintained to address issues identified
during the certification that have not yet been resolved.

TIGTA
does not agree with IRS management’s response to the recommendation.Federal Government security standards state
that an Interim Authorization to Operate is appropriate when weaknesses are
significant but can be corrected timely.The IRS’ certification of the EFDS identified weaknesses TIGTA considers
to be significant because they increase the risk that unauthorized accesses could
be made to the EFDS without detection.TIGTA
recognizes the accreditation decision is subjective but believes issuance of an
Interim Authorization to Operate is the more prudent accreditation decision for
the EFDS because it would bring increased attention to resolving the
significant security weaknesses of this important system.

READ THE
FULL REPORT

To view the report, including
the scope, methodology, and full IRS response, go to: